Monopoly: in media economics‚ an organizational structure that occurs when a single firm dominates production and distribution in a particular industry‚ either nationally or locally Oligopoly: in media economics‚ an organizational structure in which a few firms control most of an industry’s production and distribution resources Limited Competition: in media economics‚ a market with many producers and sellers but only a few differentiable products within a particular category; sometimes called
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Topic: 1 E: 461 MI: 217 3. Under monopolistic competition entry to the industry is: A) completely free of barriers. B) more difficult than under pure competition but not nearly as difficult as under pure monopoly. C) more difficult than under pure monopoly. D) blocked. Answer: B Type: A Topic: 1 E:
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and a non-collusive oligopoly. [15 marks] Collusive Oligopoly • formal (cartel) or informal agreement (tacit collusion) among producers to limit competition between themselves • they act as if they were a monopoly • discussion of the consequences of the firms acting as a monopoly • impact on consumers • members may compete against each other using non-price competition • regulations to prevent collusion Non-Collusive Oligopoly • no agreement exists between producers • existence of
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together act as a monopoly. Collaboration * When two or more oligopolies agree to fix prices or take part in anti-competitive behavior‚ they form a collusive oligopoly. They agreement can be formal or informal. * A formal agreement is a cartel and is generally illegal. OPEC is a legal cartel but it’s signed between countries and not firms. * In an informal agreement‚ the firms behave as a monopoly and choose the output that maximizes output. The diagram would be like the monopoly profit maximize
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Monopolistic Competition Monopolistic Competition is a market structure which combines elements of monopoly and competitive markets. Essentially a monopolistic competitive market is one with freedom of entry and exit‚ but firms are able to differentiate their products. Therefore‚ they have an inelastic demand curve and so they can set prices. However‚ because there is freedom of entry‚ supernormal profits will encourage more firms to enter the market leading to normal profits in the long term
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Chapter 6 After reading this chapter‚ you should be able to: LO6-1 Use elasticity to describe the responsiveness of quantities to changes in price and distinguish five elasticity terms. LO6-2 Explain the importance of substitution in determining elasticity of supply and demand. LO6-3 Relate price elasticity of demand to total revenue. LO6-4 Define and calculate income elasticity and cross-price elasticity of demand. LO6-5 Explain how the concept of elasticity makes supply and demand analysis more
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discounts (between 50% and 70%) in addition to the 2% rebate from all combined purchases when they exceed $1 million offered by NOSC. On the contrary‚ this agreement will allow NOSC to form a monopoly in this sector and as a result‚ this move
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the entire industry worldwide‚ from exploration to retail selling. However‚ it has a reputation of a monopolist‚ where it influences supply and demand. The two critical factors that De Beers carefully maintained throughout the century to remain in monopoly was to create the illusion of the scarcity of the diamonds and to keep the prices high. Realizing the benefits of the cooperation and the dangers of the oversupply‚ most diamond-producing states signed contracts with the De beers to form the cartel
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Explain how economic systems attempt to allocate and make effective use of resources. Because we live in a world where resources are scarce economic systems make use of market structures such as the perfectly competitive market model as a benchmarking tool in order to better understand consumer behaviour and recognise areas of their market structures that require improvement and how they could possibly achieve this in the most efficient and effective way. The theory of perfect competition is
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Perfect Competition In economic theory‚ perfect competition describes markets such that no participants are large enough to have the market power to set the price of a homogeneous product. Because the conditions for perfect competition are strict‚ there are few if any perfectly competitive markets. Still‚ buyers and sellers in some auction-type markets‚ say for commodities or some financial assets‚ may approximate the concept. Perfect competition serves as a benchmark against which to measure
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